Strategic Intergenerational Bequests with Stochastic Convex Production
This note reconsiders the well-known model of strategic bequest / altruistic growth, but with stochastic production satisfying a strong convexity condition. Existence of a Markov-stationary equilibrium consumption schedule, which is continuous and with all slopes in [0,1]' is established. Under smooth data and interiority assumptions, this schedule is differentiable, and marginal consumption is in (0,1).
|Date of creation:||01 May 1994|
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